International Perspectives on Public Research Organizations and Industry Partnerships: Laws, Models and Policy Options Guriqbal Singh Jaiya Director, SMEs.

International Perspectives on Public Research Organizations and Industry Partnerships:

Laws, Models and Policy Options

Guriqbal Singh Jaiya

Director, SMEs Division

World Intellectual Property Organization

www.wipo.int/sme

[email protected]

The Starting Point: Defining Innovation

• Invention v. innovation

• Sustaining v. disruptive innovation

• Incremental v. radical Innovation

Nature of Disruptive Technology

• Less profitable in the early years

• May need long periods of time before market introduction (health care)

• Need mass market acceptance to achieve full value

• Cheaper, smaller, simpler, more convenient

The Knowledge Economy

• Protected knowledge now at the core of company valuation

• Intangibles are now driving market capitalization

• No diminishing returns

• Increasing returns possible

• Network effects

The Knowledge Economy• In certain industries, patents significantly raise the costs

incurred by non patent-holders wishing to use the idea or invent around a patent – an estimated 40 % in the pharmaceutical sector, 30 % for major new chemicals, and are thus viewed as very important.

• However, in other industries, patents have much smaller impact on the cost associated with imitation (e.g., in the 7 – 15 % range for electronics) and are considered less important for protecting investment.

Source: Mansfield, Imitation costs and Patents, in The Economics of Technical Change, 1981

Knowledge Supply Chain

• Universities and industry generate knowledge and transfer knowledge.

• Barriers between the two cultures impact the ability to create new knowledge to satisfy society.

The Knowledge Process Today

• Partners need to understand how they fit in an integrated knowledge process.

• Each partner is responsible to help others succeed.

• Partners must be part of a continuous, free flow of information and knowledge.

The Knowledge Process of the Future• Outcomes for

industry include more effective access to knowledge => reduced technology development cycles.

• Outcomes for universities include increased funds and capacity for pursuing relevant basic research.

Technological Change –Technology Push versus Market Pull

Entrepreneur

Emerging Customer Segments

Unsatisfied Existing Needs

New Customer Needs

New Methods of Manufacture &

Distribution

Technological Change

Higher Productivity &

Economic Growth

Technology Push: Looking for a Problem

Primary Disruptive Technologies for Next Decade

• Gene Therapies

• Nanotechnologies

• Wireless

• Other ??

Importance of radical innovation

• Because it was in disruptive technologies that productivity growth was highest over the last 4 decades

• Information and Communication Technologies

• Biotechnology

• Most of this productivity growth achieved by new players, not by existing companies

• PROs well suited to drive radical innovation

Impact of Open Innovation• Historically, internal R&D was a strategic asset

• Nowadays, companies commercialize both their own ideas/inventions as well as those from others; for example, of other companies, public research organizations (PROs) and research universities

• Industries embracing open innovation view public research organizations (PROs) and research universities as a source of graduates and applied research

• Researchers in companies have shifted to advanced technologies and product development

Open Innovation Interfaces and Boundaries

• Cultural differences– Successful partnerships have researchers in companies working with

researchers in the public research organizations (PROs) and research universities

• Communication channels, working relationships– Creating a company culture where external contributions are accepted

• Functional organizations with specific responsibility to manage the external technology and research function– Example of Hewlett-Packard University Relations

• Work pace, expectations– Since private R & D labs work more quickly, a company may establish a

small-firm channel to take advantage of the speed difference– MIT Industrial Liaison Program manages university research to meet the

expectations of corporate sponsors

Competing on the Global Stage• Significant attention is needed to address the issue of whether human

capital will be built within the US or outside the US.

• America’s information and technology workers are being forced to compete with an exploding population of lower paid, skilled workers around the globe.

• US industries based on physical science and engineering face acute shortages of people and new ideas, forcing us to either import foreign researchers, or export our R&D facilities

• Research conducted at foreign universities provides a source of highly talented graduates, who increasingly stay in their own countries and compete with us

• To stay ahead in a skills-based economy, American companies and universities must work together to invest in developing the most skilled and flexible workforce in the world

Global R&D Migration• The shift to emerging economies first occurred in textiles

and other manufacturing jobs, followed by low-end services such as telemarketing and data entry. Now it is moving up the labor food chain to R&D jobs

• Debate over migration of white-collar jobs overseas is misguided– Proponents say it’s a win-win for America and its trading

partners– Opponents say it’s a race to the bottom that will destroy

America’s middle class• Jobs are flowing to Asia, Eastern Europe and elsewhere.

Short of a radical change in policy – say, a complete halt to international trade – information age jobs will continue to shift overseas

The IP Problem – A Relationship in Crisis

• The partnership between industry and universities has been weakened over difficulties associated with negotiating IP rights in research contracts in recent times

• Largely as a result of the lack of federal funding for research, American Universities have become extremely aggressive in their attempts to raise funding from large corporations

• Industry feels that it takes too much time, effort, and money to negotiate an agreement

• This has resulted in a perceived deterioration of trust and goodwill between industry and US universities, adversely affecting the long-term partnership between industry, universities, and government

A Silent Breaking• Given that negotiations with an American university can take more than a

year, the idea is often valueless before an agreement can be reached, and the company often spends more in legal expenses than it would be able to pay in royalties.

• This can lead to a company just walking away from the negotiation, and declining to sponsor any further research at that university.

“Typically at present, negotiating a contract to perform collaborative

research with an American university takes one to two years of exchanging emails by attorneys, punctuated by long telephone conference calls involving the scientists who wish to work together. All too often, the company spends more on attorneys’ fees than the value of the contract being negotiated. This situation has driven many large companies away from working with American universities altogether, and they are looking for alternate research partners.”

Stan WilliamsDirector, HP Quantum Science Research

Consequence: Global Migration of University Research

• Many large companies in developed countries are finding other sources of ideas and bright young researchers in emerging countries, where they receive very favorable intellectual property agreements.

“Large US based corporations have become so disheartened and disgusted with the situation [negotiating IP rights with US universities] they are now working with foreign universities, especially the elite institutions in France, Russia and China, which are more than willing to offer extremely favorable intellectual property terms.” Stan Williams Director, HP Quantum Science Research

IP Relationships With Foreign PROs and Research Universities

• Public Research Institutes (PROs) and Research Universities in China, India and Russia offer very attractive terms for research partnerships with US companies (research by purchase order).

“Many high quality foreign universities are very eager to work with American companies, and by keeping attorneys out of the discussion completely they have streamlined processes to allow a successful negotiation to take place in literally a few minutes over the telephone. It is possible to specify what one wants to a professor at a university in China or Russia and then issue a purchase order to obtain a particular deliverable. The deliverable is received and verified to be satisfactory before the American company pays for it, and in this case the American company owns all rights to the deliverable and the process by which it was created.”

Stan Williams

Director, HP Quantum Science Research

Move Towards Open Archiving

• Cultural Differences: Defensive Publication• Open Journals: Library function• In the digital environment, increasing self

publishing on the Internet• Internet, web sites, open innovation, open

archiving and public disclosure

Which way should Public Research Organisations

(PROs, including universities) go ? – Legal basis - USA

• Bayh-Dole Act P.L. 96-517 as amended• Stephenson Wydler Technology Innovation

Act P.L. 96-418Bayh-Dole Act:

• Doing away with 26 different regulations used by public US research funding bodies

• For the first time, a uniform policy was implemented that provided the contractor with the opportunity to elect to retain title to inventions



• If contractor retains title, obligation to exploit arises; reporting requirements

• Although US university were patenting before Bayh-Dole Act, but patenting and especially licensing rose by about 20 times in the last 20 years

• Government has march-in rights and may require a non-exclusive license for its own purposes

• Just giving ownership to industry contractors does not necessarily stimulate use in the markets



“…to replace the existing melange of 26 different agency policies on vesting of patent rights in government funded research….with a single, uniform national policy designed to cut down on bureaucracy and encourage private industry to utilize government funded inventions through the commitment of the risk capital necessary to develop such inventions to the point of commercial application.”

Source: House Committee on the Judiciary, 1980


(PROs, including universities) go ? – Legal Basis

• In the EU, concern that different national laws regarding the ownership and exploitation of IP from PROs, especially at universities, may create barriers to international collaborative research

• Austria, Denmark, Germany and Norway have recently introduced new legislation to grant universities title to IP resulting from publicly funded research

• In Finland, proposals to the same effect• In Japan and Korea, recent reforms in funding

regulations to this effect• These policy trends echo the landmark US Bayh-Dole

Act of 1980Source: OECD, Turning Science into Business, 2003


(PROs, including universities) go ? – Legal Basis Internationally

• Either there is employer-employee law defining ownership (Germany, Austria)

• Or there is just common law/case law/individual agreements (US)

• Or there is some regulation in patent law defining rights of the employee (UK, France)

• And then there are research sponsorship agreements (do not affect employer-employee relation but define ownership and exploitation framework in projects funded with certain - public – funds)

• On the European level (research framework programmes) such sponsorship agreements can become extremely complex as these are generally consortium deals involving numerous partners


(PROs, including universities) go ? – Some aggregate US Data

• Gross license income: 1.337 billion $• 10,866 licenses yielding income• Invention disclosures: 15,573• Total US applications filed: 12,929• New US applications filed: 7,741• US Patents issued: 3,673• Start-up companies formed since 1980:

4,320; still operational: 2,741

Source: AUTM Licensing Survey 2002


PROs (incl. universities) go ? – Some Data on the US

University of Florida • 369.25 M $ sponsored research• 207 US patents filed in FY 2002• 59 new licenses / options executed• 31.6 M $ gross license income• 62 US patents issued in 2002• 5 start-up companies formed in 2002



PROs (incl. universities) go ? – Some Data on the US

Columbia University • Research budget : 200-400 M $• 407.4 M $ sponsored research• 191 US patents filed in FY 2002• 55 new licenses / options in FY 2002• 155.6 M $ gross license income• 60 US patents issued • 8 start-up companies formed


Intellectual Property Licensing by PROs in Germany

• Fraunhofer, and to a lesser extent Helmholtz and the universities, focus heavily on collaborative R&D

• IP positions regularly compromised as a consequence

• Only Max-Planck (Garching Innovation GmbH) and Fraunhofer Patent Center achieved maturity (major revenues, involvement in litigation, management of big portfolios) in IP licensing

• After abolishing the Professor´s privilege in 2002, 18 regional IP licensing companies formed with federal sponsorship

• Each of these companies works with a number of universities in the respective region

• These programmes have remained marginal so far

• Both industry as well as some public research organisations are trying to undermine these activities by the universities

Patent applications of German PROs

0

200

400

600

800

1000

1200

1400

1600

1800

2000

year

nu

mb

er

Universities

Max Planck Society

Helmholtz Association

Fraunhofer Society

Source: Turning Science into Business, OECD, 2003

Which way should Public Research Organisations PROs (incl. universities) go ?

• No University licensing data available in Germany

• Reason: Up to 2002, licensing was mainly done by the individual inventors because of the Professor´s privilege

• However, a 1996 study for the Federal Ministry of Science showed that 60 % of the inventions were assigned to industry partners – in most cases without or with minimal compensation

Source: Becher, Gering, Lang, Schmoch: Patentwesen an Hochschulen, BMBF 1996

Which way should Public Research Organisations PROs (incl. universities) go ? - UK

• Commercialisation activities in the university sector have substantially increased in the last five years

• Many universities created technology transfer offices only in the late 1990s

• Staff numbers are still rising by almost 25 % per annum• Internationally, the UK lags behind the US in its expertise in

technology transfer, although the UK is ahead of much of the rest of Europe

• Lack of clarity over IP in research collaborations• A minimum of annual investment in research needed in order to justify

a technology transfer office; only 25 % of UK universities seem to have such critical mass, yet 80% are now running their own offices

• Still struggling with restructuring after BTG disappeared as the sole solution in 1985

Source: The Lambert Review of Business-University Interaction, December 2003

Which way should Public Research Organisations PROs (incl. universities) go ? – Other notable models

Chalmers University in Gothenburg, Sweden• Privatized the whole university; now operates as an AB• Technology transfer is a huge operation being responsible

for all contract research, an incubator, a technology park, etc.

• But Sweden lived under a Professor´s privilege system which is still very much defining the mindset

• Private IP exploitation company in the incubator

University of Twente, the Netherlands• Probably the European University concentrating most on

spin-off creation very early on (1980s)• But again, Intellectual Property Management on behalf of

the University is not at the centre stage in this effort

How to position a PRO in the market

• What is the customer base?

• Are the customers prepared, able and willing to

do R&D collaborations?

• Does this apply to all technology sectors the PRO

represents?

• Or do you have to use a custom approach in

different technological fields?

Local, Regional Customer Base

• Mainly SMEs ? High Tech ?

• Multinationals ?

• Incentives available ?

• Government co-financing ?

• Taxes ?

Local, Regional Customer Base

• What do you do if there is no such thing ?

• Multinationals ?

• Engage in company formation and business

development ?

• But that changes the requirements completely

!

Requirements• What is it? Technology Transfer or commercialization

is a parallel process of radical and incremental innovation, the determination of technical and business feasibility, the creation of intellectual assets, and the development of a plan to enter the market.

• Why do it? To build sustainable companies

Requirements• You will only be able to attract investors if your

Intellectual Property Management (IPM) approach is effective

• IP in general, trade secrets and confidential know-how are the building blocks for such an IPM program

• That makes the national legal system regarding ownership and exploitation of PRO results so important. If you cannot manage your IP assets effectively for the sake of the investor you will have no business !

Key Findings

1. Technology Transfer, IP management and licensing by PROs should be seen in the broader perspective of how the individual, national research and innovation system is structured.2. More collaborative research and research funding by industry will make it more difficult to maintain freedom to operate.3. If freedom to operate exists for PROs, mature programmes require significant lead time and professionalism.4. OECD 2003 (Turning Science into Business): On average, PROs engaged in Intellectual Property Asset Management need more than seven years to break even.5. US-Policy considerations: Jobs created (more than 300000), 3 billion in taxes generated (1 billion royalties).

Source:AUTM

Setting a Mission• Transfer of technology for society’s use and benefit• To generate income; net return on investment• Regional economic development and job creation• To recruit, reward, and retain faculty and/or

researchers• To develop relationships with Industry• To facilitate formation of Start-up/Spin-out firms

Intellectual Property Management in Public Research Organizations (PROs):

Objectives

• Maximizing Public Good (social return) or maximizing financial (private) return

• Internationally, even the leaders in technology transfer have managed to create revenues of up to 5 % of their research expenditures

• Social returns must be given due weight in the overall analysis

Methods of Technology Transfer

• Graduated Students/ Ph.D. Students

• Publications

• Conferences

• Visiting Scholars/Industry Visitor Programs

• Industrial Affiliates Programs

• Research Sponsorship, Contract Research and Faculty Consulting

• Licensing to Established Companies and to Start-Up/Spin-off Companies

Inventor’s Role in Tech Transfer

• Disclose Inventions• Identify Potential Licensing Prospects• Participate in Patent Preparation

and Prosecution• Host Visits by Potential Licensees• Provide input into the licensing strategy• Consultant (optional) to Licensee(s)

Major Issues for TLOs

• Organizational Issues

• Scope of Service Issues

• Policy Issues

• Empowerment Issues

Key Organizational Issues

• Government IPR Policy Framework: S & T, Innovation

• Legal and Regulatory Framework: National, Institutional

• Organizational Structure or Form of TLO:

– Part of PRO or University

– One-to-one or One-to-many

– Separate from PRO or University (for example: Foundation, Trust, Company, etc)

– Reports to whom

• Service Model: Legal, Administrative or Marketing

• Location: Distance between TLO and Institution

• Funding of TLO: Financial support; self-supporting

Scope of Service Issues

• Invention Evaluation, Patenting, Marketing, and Licensing (Basic Functions)

• Advisor and Educator on Intellectual Property• Negotiate/Sign Industry Research Agreements• Negotiate/Sign Material Transfer Agreements • Actively Assist in Start-Up Company Formation

Make

LicenseDevelop

BuyExpensiveAnd Risky

QuickAndLessCostly

Competitive Strategy: Every Institution

Develops and/or AcquiresTools and Technology

Market Validation Study& Identify Potential Licensees

• Identify viable commercial partner– Identify key markets– Identify potential licensees

• Resources used to identify partner– Researchers/Technologists– San Diego State University – Entrepreneurial Management

Center (EMC)– TechLink– Business network

• Have expanded program to work with government technologist and companies across the country

Market Analysis with Licensee

• EMC performs analysis for specific markets discovered

• Outside expert consultants used where possible• SSC SD funds scientist labor and travel to work

with licensee• Market analysis provides independent

information to help company with decision to proceed with licensing of technology

Key Policy Issues• Ownership of Intellectual Property

– Patents and Know-how/Trade secrets

– Copyright, Industrial Design & Trademark

– Plant Breeder’s rights

• Incentives to Disclose Inventions– Royalty Sharing; Consulting; Research Funding

• Conflict of Interest & Conflict of Commitment– Institutional

– Individual

“Of 3200 universities, perhaps 6 have made significant amounts of money from their intellectual property rights.

IP rights should be pursued as a means for interaction with industry rather than as a means for raising revenue from commercialization.”

John C. HurtNational Science Foundation

University/Industry Partnership Lesson

Sharing of Licensing Income(After patent expenses are reimbursed)

10%5%20%25%0%40%VUMC: Above $100K per year

0%10%20%20%0%50%VUMC: First $100K per year

10%5%25%10%10%40%U Central:

Above $100K per year

0%10%30%0%10%50%U Central:

First $100K per year

Tech Research Fund

Tech Promotion Fund

Inventor’s School

Inventor’s Dept

Inventor’s Lab

Inventor/

Creator

Revenue Sharing From IP Exploitation

Cumulative net income

Inventor

Department R&D Directorate

Trust

First £50 000

50% 10% 20% 20%

Next £100 000

40% 10% 25% 25%

Next £100 000

30% 10% 30% 30%

Over £250 000

25% 10% 32.5% 32.5%

NoteIn practice, Trusts are recommended to consider sharing the revenue of their associated University as the basis for their own policy. By doing so, the potential for conflict within inter NHS/University groups is reduced.

Issues to be Considered in Issues to be Considered in NegotiationsNegotiations

• Which party initiated the idea?

• Who is contributing financially: Money, Equipment, Feedstock, Supplies ?

• Who is contributing technically?

• Cost of the overall development program?

• Cost to bring it to market?

• Risks: Who pays for the failures?

Who is Best Suited to File for Patents?Who is Best Suited to File for Patents?

Industry– Full time experienced staff

– Focused on market segments

– Can select the proper foreign filing

– Works with the people who are developing the use and market

– Knows where the technology can be applied to similar opportunities.

University– Has experienced staff but is

spread thinly

– Communications between the scientists and IP personnel is more distant

– Scientist is not connected to the market

– Do not foreign file due to costs, - limited protection

– Their market is industry

Industry thinks it is best suited.

Five Types of IP ArrangementsFive Types of IP Arrangements

1) Industry owns the IP generated as a result of the collaborative research.

2)Industry owns the IP but allows the University to continue with development for research purposes only.

3) The University owns the IP but industry has exclusive rights.

4) The University owns the IP but the business has exclusive rights in a narrow field of use.

5) the University owns the IP but offers the technology non-exclusive, royalty free.

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The Industrial ModelThe Industrial ModelIntellectual property

Proprietary position

Competitive advantageUnique product

Innovation

Acceptance in theMarket place

Equity Participation ModelEquity Participation Model

•36% Tech Founder ($10.8mm)

•9% University ($2.7mm)

•22% Investor A ($6.6mm)

•33% Investor B ($10mm)

•54% Tech Founder ($3.24mm)

•13% University ($.78mm)


•80% Tech Founder

•20% University

•100% Tech Founder

•28% Tech Founder ($42mm)

•7% University ($10.5mm)


•28% Investor B ($42mm)

•20% Public Market ($30mm)

~$6MM Valuation~$6MM Valuation



License Agreement from University

License Agreement from University

Investor A for 33% with $2MM Investment

Investor A for 33% with $2MM Investment

Investor B for 33% with $10MM Investment

Investor B for 33% with $10MM Investment

IPO raising $30MMIPO raising $30MM

No ValuationNo ValuationValue of TechnologyValue of Technology

**Every investment accepted by the company in exchange for equity serves to establish the valuation of the company.**Every investment accepted by the company in exchange for equity serves to establish the valuation of the company.

Empowerment Issues• Signature Authority for License Agreements• Review Committee: Is it needed?• Legal Review: When is it needed?• Authority of Licensing Officers/Associates

– Evaluation

– Patenting

– Marketing

– Negotiating terms of the License

Intellectual Property Management by PROs

Technology Pool

Cooperative R&Dmature companies Licensing Start-Up Companies

Link to Venture Capital

Non-exclusiveWho owns what?

Quasi-exclusiveField of Use

Exclusive

Joint Venture

Equity

Licensor

LicenseeProduct /Service

Development

Market

•License •Technology•Potentially people

Sales

Revenue

•Lump sum License Fee

•Royalty

Commercialization Through Licensing


(PROs, including universities) go ? • Historically, in the US little co-operative R&D• More focus on licensing and start-ups (beginning

in about the mid 1980s); an effect of Bayh-Dole Act in the US

• In Europe, much more interest in project based co-operation with the private sector: one example is the European Framework Research Programmes (FP 6)

• Limited IP and licensing infrastructure at most European PROs

• In recent years, both sides trying to adopt some of the features of the other model


(PROs, including universities) go ? • Historically, little co-operative R&D in the US

• “Throughout most of the 1960s and 1970s, the business community was the source of 3% of total research performed in universities.”

• “By the mid 1980s this had risen to 6 % and in the 1990s to 7 %.

Source: Wendy H. Schacht, CRS Report for Congress; R&D Partnerships and IP, Implications for US Policy, December 2000


(PROs including universities) go ? “The preferred mechanism of German industrial

support for academic research is a research contract with clearly defined deliverables. In the US, most industrial funding of academic R&D takes the form of grants, more open-ended arrangements without specifically defined research deliverables……..”

Source: Technology Transfer Systems in the United States and Germany, Lessons and Perspectives, German American Academic Council Foundation, National Academy of Sciences 1997


(PROs, including universities) go ?

“….the panel judges university-industry research interaction in Germany to be more heavily oriented toward short-term, incremental problem solving than university-industry linkages in the United States.”

Source: Technology Transfer Systems in the United States and Germany, Lessons and Perspectives, German American Academic Council Foundation, National Academy of Sciences 1997


(PROs, including universities) go ? • Some European Research

Universities now receive up to 40 percent of their research budgets from private sources on a project contract basis

• Example: RWTH Aachen

• Total budget (excl. hospital): 367 Mio €

• Research Budget: 142,5 Mio €

Source: RWTH Drittmittelreport 2003

Private Funds

Government

EU

German ScienceFoundation

Critical Ingredientsfor a Thriving Environment

• Strong, diverse research programs • Technology Transfer• Business start-up facilities• Research Parks• Access to capital• Management

Major Findings from the DEST Report - I

• Australian universities: significantly strengthened their research commercialisation capabilities, performance.

• Scale is crucial: – effective research commercialisation requires sufficient portfolio of

research,

– Commercialisation function: requires breadth and depth of capacity.

– a significant challenge to smaller and regional universities.

• Access to pre-seed capital - the most common financial need for universities in research commercialisation

Major Findings from the DEST Report - II

• Licensing of IP: the most common form of research commercialisation– generates most revenue, well done, lower risk.

• Australian industry: – fragmented, small size and low R&D investment – poor capacity to absorb university-generated technology– linkages have to be established with overseas firms.

• Creation of spin-off firms an important commercialisation mechanism – holds and develops IP with high return potential– Common in the biosciences and IT fields. – Spin-offs that generate a huge growth in value, are rare.

• Commercialisation hubs:– key role in transforming knowledge into economic value

Australia: What is ATP Innovations?

• A commercialisation hub:– commercialisation of innovative Australian technologies – focussed on technology business development– A hub for the innovation & commercialisation community

• Technology convergence encouraged:– Information & Communications Technology– Life Sciences: Biotechnology & Biomedical– Micro & optical electronics

• Provides time intensive resources that start-ups may not always be able to access from their technology commercialisation office

• A resource to be utilised• A partner in business development

ATP Innovations addresses the needs of start-up ventures

• Sydney metropolitan location, regional outreach• Owned by 4 major universities• Clients: public and private sectors• Currently 25 clients, 11 anchor tenants• Full facilities, 7000 m2 space, 85- 95% occupancy• Full business support program suite – bizStart, bizConnect,

bizNetClub, bizCapital.• Operates to world best practice• Connected technology community

CEO: Mark Bradley

Dir. Business Programs: Charles Lindop

Dir. Biobusiness Programs: Paul Field

CFO: Charles Summers

ATPi Commercialisation Process

Graduate

Market Validation Customer Management Business Expansion

Realistic Business Plan

• After ~ 3 years

• Space >125m2

• >20 staff

• Proven/strong / credentialed

Professional development, forums, workshops, Networking events

Applicants accepted

ATPi - University Technology Commercialisation Partnership: a Model

University Commercialisation Office

Researchers create IP

Consultation with Commercialisation

Office

Assessment Made

Go/No Go

IP Protected

IP Abandoned

License Agreement

Decision to create Start-up

Start-up Company Created

ATPi JoinsProject team

ATPi: Start-upSeed Capital provided

Start-up Moves toATPi business

precinct

Commercialisation Process

Company Graduates

ATPi: Start-upRent Relief provided

TrusTECH is a DTI Biotechnology Exploitation Platform (BEP)

Challenge Programme, funded for 4 years TrusTECH is a partnership betweeno Central Manchester & Manchester Children’s University Hospitals NHS Trusto The Royal Liverpool & Broadgreen University Hospitals NHS Trusto The University of Central Lancashire (UCLAN) TrusTECH provides a service to the NHS Trusts and Universities in the Northwest TrusTECH provides help and advice in the identification, protection and exploitation of intellectual property TrusTECH provides access to the expertise of associated organisations e.g. manIP, Technology Transfer companies, patent agents

What is TrusTECH?

Technology Exploitation Managers

Responsible for visiting NHS Trusts and Technology Auditingo Dr Lynsey Grieveson – based in Preston [email protected] 01772 892787o Dr Ruth Hale – based in Manchester [email protected] 0161 276 5786o Dr Sonja Jonas – based in Liverpool [email protected] 0151 794 4487

Innovation Unit Manager • Responsible for managing the work of the Innovation Unit

and visiting NHS TrustsDr Richard Deed, [email protected] 0161 276 5763

Project Coordinator

Responsible for the day-to-day administration of the Unit Bridget Liddle, [email protected] 0161 276 5764

The TrusTECH Team

TrusTECH Services

NHS Trust agrees to pay a service fee of 0.5% of its R&D budget; in return the Trust can expect the following

Support for IP management and policy development Technology/innovation auditing Opportunities for collaborative research projects Pooling of IP in portfolios Links to external funding opportunities

Assistance with development and exploitation of innovation and IP (Costs are not included in the service fee)

IP training for Trust personnel (Costs are not included in the service fee) Membership of a region wide network of NHS Trusts developing IP

All IP discovered remains the property of your organization

• Introductory Meeting with R&D Manager and/or designated contact · A systematic review of the research in progress at your Trust · Identification of research projects and groups or staff involved in

innovation · Follow-up visits to relevant personnel · Preparation of audit reports · Identification of innovations of commercial value · Advice on exploitation and protection of IP

Technology/Innovation Auditing

• Fundamental, endemic differences between industry and university mission and world view (culture)

Fundamental Barriers to Success (DCW View)

• Industry and University “wants” in contract negotiations are often poles apart, especially in IP. Federal and state laws, which were meant to help, actually hurt collaboration.

• Fundamental shift since WW II in engineering department’s emphasis, reward system and training of students and faculty is unfavorable to fostering type of collaboration industry needs

• Large disconnect between industry and academe in what constitutes “Effective Technology Transfer”

• Few plans or programs to remedy the situation

• Intellectual Property Rights• Publication Rights• Royalties & Licensing Fees• Proprietary Information• Patents• Warranty and Indemnification• Selection of Student Participants

Areas of Tough Contract Negotiation

These issues must be resolved in

win-win situation for both Industry and

the University

“Intellectual Property Rights” is the Toughest Challenge Faced Before Contract Is Signed

• To succeed, technology must - “Arrive in time” to be used - “Get incorporated” into the product

(e.g. via the design / analysis system, etc.) - “Give Competitive Advantage” to GEAE in the marketplace

• May need change / modification of university culture - What constitutes “acceptable” thesis project - Return to what “engineering really is” - Does university really want to work “our problems”

Technology Transfer from Academe to Industry

Effective Technology Transfer is the Toughest Single Challenge Faced After Contract Is Signed

• Present results (transfer technology) in format that fits sockets & satisfies CTQ’s

How best to transfer university technology to Company

Effective Technology Transfer

• Identify CTQ’s (critical to quality) for “sockets”

• Identify “Sockets” into which technology can fit

(The “LEGOTM model”)

• Make sure results are accepted by the Industry

University Technology

D E S I G N and/or

ANALYSIS S Y S T E M

Steps for Effective Technology Transfer to GEAE

1. Conduct a “Customer Value Chain Analysis” (CVCA)• Identifies the parties involved and shows their relationships• Shows flow of information, complaints, money, decisions, results, etc.

4. Use the “LEGOTM model” concept for packaging technology to fit GEAE design and analysis system

• Present technology using EM’s to fit GEAE system like a LEGOTM block

2. Capture the “Voice of the Customer” (VOC)• Identify what the critical customers really want (lightweight, reliable, safe, etc.)• Identify Critical to Quality (CTQ) items

5. Use Project FMEA to manage program• Risk assessment and abatement• Critical path scheduling

3. Establish “Engineering Metrics” (EM) from VOC• Characterize performance with measurable quantities (max temp, MHz, MPG)

One Starting Point to Developing Effective Industry / University Research Partnerships

Universities focus on High-impact Technologies 1. Those that reduce cost pain (IFSD, Aborted

Take-off, unscheduled engine removal, delays and cancellations, manu. errors)

At Issue: Universities often do not see these types of “practical” problems as scientific enough for Ph.D. thesis

2. Those that industry sees as needed to improve their product (business) - future advanced propulsion systems - component improvements

GEAE Concentrating Academic Expertise on Critical Technology Needs

University Strategic Alliances

GEAE

Georgia Tech•Probabilistic Design Methodology

•New Propulsion Technologies

Stanford University•Turbine Cooling & Heat Transfer•Design for Six Sigma - Manufacturing

Swiss Federal Institute of Technology, Zurich•CFD Turbine & Compressor

Eidgenössische Technische HochschuleZürich

Aachen RWTH, Germany•Centrifugal Compressors•Compressor CFD

RHEINISCHWESTFÄLISCHETECHNISCHEHOCHSCHULEAACHEN

University of Cincinnati•Acoustics•Aerodynamics

Ohio State University•Full scale turbine testing at engine conditions•Aeromechanics

Duke University•Aeromechanics

MIT•Compressor

Bay Area Science and Innovation Consortium(BASIC) IP Project

• BASIC is a collaboration of the Silicon Valley region’s major research universities (Stanford, UC Berkeley, UCSF, …), businesses (IBM, Genencor, HP, Lockheed, SIA, …), and national labs (Lawrence Livermore, NASA Ames, Sandia, …)

• BASIC is dedicated to developing programs that take advantage of the unique capabilities at Bay Area R&D institutions to provide solutions for critical national and regional challenges

• Goal of the IP Project is to achieve a shared understanding of general principles that will more effectively advance the IP interests of public and private research institutions

• Motivation is driven by recognition that a problem exists and is becoming more contentious and complex over time

• IP Project Desired Impact and Outputs– A set of general principles– Achieve social / culture change in the total IP system– Enhance economic and business development – create a virtuous cycle/environment

rather than a vicious cycle

Gelato Federation

• HP encourages collaborations with and among universities worldwide, exemplified by the Gelato Federation

• The Gelato Federation is a world-wide consortium of research organizations dedicated to enabling scalable, open source Linux-based Itanium computing solutions to address real world problems in academic, government, and industrial research

www.gelato.org

The Gelato Federation

University ofNew South Wales

BII SingaporeiHPC

Tsinghua University

Groupe ESIEE

NCSA UIUC

Purdue

University of Waterloo

Hewlett-Packard(sponsor)

CERN NCAR

www.gelato.org

PSC

PNNL

Univ Copenhagen

INRIA

UCSD/SDSC

Univ Karlsruhe OSC

Russian Academy of Science

BP

KTH Stockholm

UPRM

PUCRS

GaTechUni Houston Zeijang University

Fudan University

The Partnership Continuum

• An increasing level of trust is developed in the partnership.

• The relationship becomes a holistic engagement in the strategic partnership phase.

New Relationship Models

“Dedicated to the Public Domain” Model• Some university faculty put the results of their research directly into the

public domain and do not try to obtain a patent

• This strategy has been quite successful, since many companies would rather just give money to a university in return for access to students than waste time, money and energy in futile licensing negotiations

• In this approach, all companies have equal access to the ideas, and those who push the hardest (and hire the students who worked on them) will bring them to market

• Neither the university nor faculty receive royalty income, but those who adopt this strategy have found that the increase in direct research support more than outweighs the potential (but seldom realized) income


“Research Commons” Model• Proposed by Bob Miller, Vice Chancellor of

Research, UC Santa Cruz• Multiple companies and universities interact on

research activities in the research commons• IP is freely available to the companies and

universities participating in the commons• Under discussion at the UC System


“Second Generation Technology Transfer” Model• Proposed by Gerald Barnett, UC Santa Cruz Technology Transfer

Office

• Current approach of patenting and licensing university inventions to generate royalties is flawed because it concentrates resources on trying to find a few winners, rather than using university technologies to build relationships with companies that might actually use those ideas

• Barnett advocates using intellectual property as a tool for working with industry more, not less

• Awards nonexclusive licenses to industrial sponsors of research


“Privatization” Model• Proposed by Mike Uretsky, NYU Stern School of Business

• His thesis is that universities are the wrong place to do technology development, since universities can’t move fast enough and don’t understand the marketplace

• The challenge is dealing with economic realities that keep this from being successful

• Uretsky proposes the formation of a middle operation between universities and industry to focus on development, prototyping, testing, refining, and commercialization of technologies

Conclusions• Focus on Building long-term Strategic Partnerships that help each other to

be successful:

– Build trust and mutual respect

– Maximize the creation and transfer of knowledge

– Publish and use public domain where appropriate

– Emphasize total revenue to the university(focus on research funding)

– Favored vendor status

– Access to government resources

– Accreditation & learning science and teaching

– Technology program portfolio/balance science & engineering

• We believe this leads to win-win collaborations.

International Perspectives on Public Research Organizations and Industry Partnerships: Laws, Models and Policy Options Guriqbal Singh Jaiya Director, SMEs.

Documents

radical innovation slide

new knowledge

world slide

problem slide

convenient slide

knowledge economy

university research

transfer knowledge